How Developmental States promote growth? Case studies from South Korea, Singapore and China. By Bunthoeun Thun1 04 September 2018 1 Mr. Bunthoeun Thun is Director of Research and International Relations Department, Royal School of Administration, Cambodia. This paper was part of his research module during his study at University of Bradford, UK, in 2017-18. Contact e-mail: [email protected] Dedication To my beloved family, my wife, my six-year-old daughter (Lita), and my five- year-old son (Lichhay) i Acknowledgements To the great Buddha for making me patient and tireless in committing my work. There are several people who have significantly contributed to the production of this dissertation. First, I would like to pay special gratitude to Dr Anand Prathivadi Bhayankaram, my supervisor and professor, who has not only provided brilliant lectures, but also valuable feedback, guidance and encouragement for my dissertation. I am grateful to Dr Fiona Macaulay, a professor who inspired me to choose my dissertation topic from the early. With great thanks also to Dr Rashmi Arora, my personal tutor and professor, who has contributed to building my research skills and interesting lectures. Also, I would like to pay gratitude to Dr Farhad Analoui, Dr Hossein Jalilian, and Dr Behrooz Morvaridi, my professors who have delivered great lectures of both module and dissertation courses to build my in-depth knowledge and skills. Unforgettable thanks to Sue Baker and other international student office staff, who offered me hospitality and supports during my early arrival at Bradford. Importantly, I am indebted to Matthew Andrew and other librarian staff who have provided great lectures on library research and reference skills. Overall, I pay my gratefulness to the entire academic and administrative staff as well as the management of the Division of Peace Studies and International Development, and the University of Bradford. More than that, I am greatly indebted to the Joint Japan/World Bank Graduate Scholarship Program (JJ/WBGSP) that has offered me scholarship to fund my study for the whole year. Also, I would like to pay my gratefulness to my employer, the Ministry of Civil Service of Cambodia and its management, which has encouraged me to come to study. Finally, I deeply thank my family, my friends and colleagues who have always provided great encouragement and supports. ii Table of Contents Dedication ................................................................................................................................... i Acknowledgements .................................................................................................................... ii Table of Contents ..................................................................................................................... iii List of figures and tables ............................................................................................................ v List of Abbreviations and Acronyms ........................................................................................ vi Abstract .................................................................................................................................. viii Chapter One: Introductory Background..................................................................................... 1 1. Introduction ........................................................................................................................ 1 2. Rationale of the study ......................................................................................................... 3 3. Research questions, objectives, and methodologies........................................................... 4 3.1. Research Question ....................................................................................................... 4 3.2. Main Objective ............................................................................................................ 4 3.3. Specific Objectives ...................................................................................................... 4 3.4. Research Methodologies .............................................................................................. 4 4. Organization of the study ................................................................................................... 5 5. Chapter summary ............................................................................................................... 5 Chapter Two: Literature Review ............................................................................................... 6 1. State versus Market Debates .............................................................................................. 6 1.1. Keynesianism versus Neoclassical Economics ........................................................... 6 1.2. Resurgence of Market versus Return of State ............................................................. 7 2. Developmental state and growth ........................................................................................ 8 2.1. Growth and Development .......................................................................................... 10 2.2. Empirical growth and HDI improvement in South Korea, Singapore and China ..... 12 3. Institutions for Growth and Development ........................................................................ 13 3.1. Features of DS institutions ........................................................................................ 15 3.2. Weberian bureaucracy, trust and growth ................................................................... 16 3.3. Quality of government as impartiality ....................................................................... 18 4. Test Model........................................................................................................................ 19 5. Chapter summary ............................................................................................................. 20 Chapter Three: Case Studies on South Korea, Singapore and China ...................................... 21 Case 1: South Korea ............................................................................................................. 21 1. Historical background and advent of DS ......................................................................... 21 iii 2. State leadership and intervention ..................................................................................... 22 3. Bureaucratic institutions and cooperation ........................................................................ 25 Case 2: Singapore ................................................................................................................. 27 1. Historical background and advent of DS ......................................................................... 27 2. State leadership and intervention ..................................................................................... 28 3. Bureaucratic institutions and cooperation ........................................................................ 30 Case 3: China ....................................................................................................................... 32 1. Historical background and advent of DS ......................................................................... 32 2. State leadership and intervention ..................................................................................... 33 3. Bureaucratic institutions and cooperation ........................................................................ 35 Chapter Four: Discussion ......................................................................................................... 40 1. Introduction ...................................................................................................................... 40 2. DS institutions in explaining growth in South Korea, Singapore and China ................... 40 3. Autonomous bureaucracy and impartiality ...................................................................... 41 4. DS capacity in coping with 1997 financial crisis ............................................................. 42 5. Implications for other developing countries..................................................................... 43 6. Limitations of the study.................................................................................................... 43 7. Chapter summary ............................................................................................................. 43 Chapter Five: Conclusions ....................................................................................................... 44 References ................................................................................................................................ 46 Appendixes .............................................................................................................................. 52 Appendix 1: The shortcomings of structural adjustment programs (SAP) .......................... 52 Appendix 2: Korea before Japan’s colonization .................................................................. 53 Appendix 3: Korea’s three phases of stabilization ............................................................... 54 Appendix 4: Chinese community in Singapore during and after British colonization ........ 55 Appendix 5: Winsemius Report ..........................................................................................